Item 9A. Controls and Procedures
Item 9A. Controls and Procedures
(a) Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Annual Report on Form 10-K. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act), means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the
86
Table of Contents
Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, our management recognizes that disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable assurance that the objectives of the disclosure controls and procedures are met. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at a reasonable assurance level as of December 31, 2024.
(b) Management’s Report on Internal Control Over Financial Reporting
This annual report does not include an attestation report of our registered public accounting firm due to an exemption for “emerging growth companies.”
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with GAAP.
Management, with the participation of our Chief Executive Officer and Chief Financial Officer, conducted an assessment of the effectiveness of our internal control over financial reporting as of December 31, 2024 based on the criteria described in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.
Based on this assessment, our management concluded that our internal control over financial re porting was effective as of December 31, 2024, due to the remediation of three material weaknesses in our internal control over financial reporting described below. I n light of this fact, our management has concluded that the consolidated financial statements for the periods covered by and included in this Annual Report on Form 10-K fairly present, in all material respects, our financial position, results of operations and cash flows for the periods presented in conformity with GAAP.
c) Remediation of Previously Identified Material Weaknesses in Internal Control Over Financial Reporting
As previously reported, management determined that the Company had the following material weaknesses in its internal control over financial reporting at December 31, 2023:
i. our controls were not operating effectively to allow sufficient and timely review of significant accounting transactions, account reconciliations and presentation of the statement of cash flows; and
ii. our controls over certain equity transactions were not operating effectively to allow management to timely identify errors related to the recording of those transactions; specifically, we did not have sufficient technical resources to appropriately identify errors in the accounting for equity awards, resulting in misstatements relating to completeness and accuracy of stock-based compensation.
iii. our controls were not adequately designed and operating effectively to allow sufficient and timely review of the key assumptions and mathematical accuracy of our going concern assessment.
Management, with the participation of our Chief Executive Officer and Chief Financial Officer, has continued to implement remediation plans throughout 2024. The actions we took to remediate the material weaknesses included the following:
• We hired additional accounting and financial personnel who possess public company accounting and reporting technical expertise, including a Chief Financial Officer, VP Corporate Accounting, and other key accounting and finance roles to oversee internal controls and procedures and implement a formal closing process.
87
Table of Contents
• Our Internal Audit team assisted us in evaluating our internal-control framework and made several recommendations for findings noted. We enhanced our controls and documentation support based on these recommendations.
• We have strengthened procedures and controls around balance sheet reconciliations and cash flow review by implementing account reconciliation software and ensuring appropriate personnel include adequate source data and procedures to support our documentation.
• We enhanced our ERP system to assist us in supporting reconciliations and in processing transactions related to fixed assets, leases, revenue recognition, and equity administration more efficiently and effectively. The ERP system provides significant enhancements to our internal control and reporting environment.
We completed our remediation plan for all material weaknesses noted above and believe our controls are appropriately designed.
Through testing of our internal controls completed during the year ended December 31, 2024, management has determined that the controls related to the remediation actions discussed above were effectively designed and operated effectively for a sufficient period of time to enable us to conclude that the material weaknesses have been remediated as of December 31, 2024.
(d) Inherent Limitations on Effectiveness of Controls
A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the company have been detected. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
(e) Changes in Internal Control over Financial Reporting
Except as otherwise described herein, there were no changes in our internal control over financial reporting identified in connection with the evaluation required by Rules 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the quarter ended December 31, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Item 9B. Other Information
Trading Arrangements
During the Company's last fiscal quarter, none of the Company’s directors and officers (as defined in Rule 16a-1(f) under the Exchange Act) adopted or terminated contracts, instructions or written plans for the purchase or sale of the Company’s securities pursuant to Rule 10b5-1.
Item 9C. Disclosure Regarding Foreign Jurisdiction That Prevent Inspections
Not applicable.
88
Table of Contents
Part III
Item 10. Directors, Executive Officers and Corporate Governance
The information required by this item is incorporated by reference to the definitive Proxy Statement for the 2025 Annual Meeting of Stockholders.
Item 11. Executive Compensation
The information required by this item is incorporated by reference to the definitive Proxy Statement for the 2025 Annual Meeting of Stockholders.
Item 12. Security Ownership of Certain Beneficial Owner and Management and Related Stockholder Matters
The information required by this item is incorporated by reference to the definitive Proxy Statement for the 2025 Annual Meeting of Stockholders.
Item 13. Certain Relationships and Related Transactions, and Director Independence
The information required by this item is incorporated by reference to the definitive Proxy Statement for the 2025 Annual Meeting of Stockholders.
Item 14. Principal Accounting Fees and Services
The information required by this item is incorporated by reference to the definitive Proxy Statement for the 2025 Annual Meeting of Stockholders.
89
Table of Contents
Part IV
Item 15. Exhibits and Financial Statement Schedules
(a)
(1) Financial Statements. We have filed the consolidated financial statements listed in the Index to Consolidated Financial Statements, Schedules, and Exhibits included in Part II, Item 8, “Financial Statements and Supplementary Data” of this Annual Report on Form 10-K.
(2) Financial Statement Schedules. All financial statement schedules have been omitted because the information required to be presented in them is not applicable or is shown in the financial statements or related notes, which is incorporated herein by reference.
(3) Exhibits . The following exhibits are included herein or incorporated herein by reference:
Incorporated by Reference
Exhibit
Number Description Form File No. Exhibit Filing Date Filed Herewith
3.1 Restated Certificate of Incorporation of Registrant, as amended and currently in effect.
10-Q 001-41026 3.1 08/14/2023
3.2 Amended and Restated Bylaws
8-K
001-41026 3.1
12/11/2024
3.3 Certificate of Retirement
8-K 001-41026 3.1 07/10/2023
4.1 Description of the Registrant’s Securities Registered Pursuant to Section 12 of the Exchange Act of 1934
10-K 001-41026 4.1 03/28/2022
10.1 Form of Indemnification Agreement by and between the Registrant and each of its directors and executive officers.
S-1 333-260333 10.1 10/18/2021
10.2+ 2011 Stock Plan, as amended, and forms of agreements thereunder.
S-1 333-260333 10.2 10/18/2021
10.3+ Amended and Restated 2021 Equity Incentive Plan and form of agreements thereunder
10-K
001-41026
10.3
04/01/2024
10.4+ 2021 Employee Stock Purchase Plan.
S-1 333-260333 10.4 11/02/2021
10.5+ Offer Letter, dated July 9 , 202 4 , by and between the Company and Marc Suidan .
8-K
001-41026
10.1
08/08/2024
10.6† Loan and Security Agreement, dated October 21, 2021, by and between the Company and City National Bank.
S-1 333-260333 10.6 10/18/2021
10.7 First Amendment to the Loan and Security Agreement, dated October 21, 2021, by and between the Company and City National Bank.
10-K 001-41026 10.8 03/28/2022
10.8 Second Amendment to the Loan and Security Agreement, dated as of October 21, 2021, by and between the Registrant and City National Bank
8-K 001-41026 10.1 04/27/2022
10.9 Third Amendment to the Loan and Security Agreement, dated as of January 20, 2023, by and between the Registrant and City National Bank
10-K 001-41026 10.10 03/31/2023
10.10 Fourth Amendment to the Loan and Security Agreement, dated as of December 29, 2023, by and between the Registrant and City National Bank
10-K
001-41026
10.10
04/01/2024
10.11
B a ckblaze, Inc. 2024 New Employee Equity Incentive Plan and form s of agreement thereun der
S-8
333-281983
10.11
09/06/2024
19.1
I nsider Trading Polic y
X
21.1 List of Subsidiaries of Backblaze, Inc.
X
23.1 Consent of BDO USA, P.C., Independent Registered Public Accounting Firm.
X
24.1 Power of Attorney ( contained on signature page to this report ) .
X
31.1 Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
X
90
Table of Contents
31.2 Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
X
32.1* Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
X
32.2* Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
X
97.1 Policy relating to recovery of erroneously awarded compensation, as required by applicable listing standards adopted pursuant to 17 CFR 240.10D-1
10-K
001-41026
97.1
04/01/2024
101.INS Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document. X
101.SCH Inline XBRL Taxonomy Extension Schema Document. X
101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document. X
101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document. X
101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document. X
101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document. X
104 Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101). X
_______________
* The certifications attached as Exhibit 32.1 and 32.2 that accompany this Annual Report on Form 10-K are not deemed filed with the Securities and Exchange Commission and are not to be incorporated by reference into any filing of Backblaze, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Annual Report on Form 10-K, irrespective of any general incorporation language contained in such filing.
+ Indicates management contract or compensatory plan, contract or agreement.
† Pursuant to Item 601(a)(5) of Regulation S-K, certain exhibits and schedules to this agreement have been omitted. The Company hereby agrees to furnish supplementally to the Securities and Exchange Commission, upon its request, any or all of such omitted exhibits and/or schedules .
(b) Exhibits. See Item 15(a)(3) above.
(c) Fin ancial Statement Schedules. See Item 15(a)(2) above.
Item 16. Form 10-K Summary
Not Applicable.
91
Table of Contents
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of San Mateo, State of California, on this 11th day of March 2025.
Backblaze, Inc.
/s/ Gleb Budman
Gleb Budman
Chief Executive Officer and Chairperson
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints Gleb Budman and Marc Suidan, and each of them, as his or her true and lawful attorney-in-fact and agent with full power of substitution, for him or her in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with all exhibits thereto and other documents in connection therewith, with the SEC, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully for all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his substitute, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature Title Date
Chief Executive Officer and Chairperson
(Principal Executive Officer)
March 11, 2025
Gleb Budman
Chief Financial Officer
(Principal Financial and Accounting Officer)
March 11, 2025
Marc Suidan
Director March 11, 2025
Jocelyn Carter-Miller
Director March 11, 2025
Barbara Nelson
Director March 11, 2025
Earl E. Fry
Director March 11, 2025
Evelyn D’An
92